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Concern after govt ousts Eskom chair

Jun 09 2011 20:15 Reuters

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Cape Town - SA has named Zola Tsotsi as new chairperson of power utility Eskom as the government seeks to reshuffle the leadership of its troubled state-owned enterprises, a cabinet statement said on Thursday.

Tsotsi, the former chairperson of the Lesotho Electricity Corporation, will replace Mpho Makwana, who became chairperson after a leadership crisis at Eskom in late 2009.

Eskom, which supplies 95% of South Africa's power, is investing R460bn to build new power plants and avoid a repeat of a crisis which forced mines and smelters to shut for days in early 2008 and cost South Africa billions of dollars in lost output.

Cabinet spokesperson Jimmy Manyi said the move to replace Makwana was not a reflection on his work, but rather part of the government's bigger strategy to change the way state-owned companies are run.

"It was done within the broad principles of renewing the board, bringing new thinking and new strategies in," Manyi said.

Foreign investors have been closely watching the leadership battles at Eskom, eager to know if the company would be able to supply them with enough electricity to run their operations and to power their future expansions.

Eskom has said that power supply in Africa's biggest economy will be tight over the next few years until the first of its new power plants come on stream.

Makwana took over the chairmanship at Eskom from Bobby Godsell, who left together with then chief executive officer Jacob Maroga after an internal battle that dragged on for weeks.

Makwana, who has been part of the Eskom board since 2002, could not be reached for comment.

Manyi said the government was also looking at restructuring the board of state-owned freight logistics Transnet, responsible for transporting coal and iron ore from mines to export terminals at the coast. This could include the removal of chairperson Mafika Mkwanazi.

"There is a possibility that vacancies will be filled at the Transnet annual general meeting later this month and new blood introduced," he said.

Objections

The chamber of mines, which represents the mining companies, said it was concerned by the changes in both companies, adding that both Makwana and Mkwanazi had managed to bring stability to both enterprises.

"We are deeply concerned... (and) do not understand the logic behind their removal from office," the chamber's chief executive Bheki Sibiya said in a statement.

"Stability and efficiencies in these two enterprises are critical in ensuring a competitive and growing mining industry which is important to the economy of the country."

The National Union of Mineworkers also raised objections to the government making board changes at Eskom without proper consultation.

Recently appointed Public Enterprises Minister Malusi Gigaba, who oversees both Eskom and Transnet, has said he would like state-owned enterprises to work in partnerships with the private sector to speed up much-needed investments in power and transport infrastructure.

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